Student loan consolidation rates are made easy and simple to benefit large number of students coast to coast. On an average students are piled up with loans to the tune of $10,000 each by the time they graduate. And of the total students in colleges and universities, nearly 80% study on student loans in the US. With the recession making it difficult for many to go to college, loans are a great help in achieving their dreams.

Differentiate between the 2 loans:

There are different types of loans with myriad interest rates that parents and students are checking out on to provide higher education for their children. You can choose from Federal Education and private education loans that are common in the US. If you are aiming for consolidation, you need to differentiate between the two types of loans. Student loan consolidation rates from the two major sources are different.

Interest rate calculation for consolidation purposes in the case of federal education loans is controlled and regulated by the federal government. Depending on where and which private organization you are taking loans from, the rates would be calculated for consolidation purposes. Private lenders are also under similar regulations, but they are not a one-size-fits-all as they can vary from one lender to the other.

For federal loans, the calculation is simple as it is based on the average rate of all the loans and then rounded up to the nearest one eighth percent while the maximum rate could be 8.25%. The basic process is to make the loan between the highest and the lowest interest rate. If you are enjoying a PLUS student loan, you could avail of several benefits like lower student loan consolidation rates. You can save up to 0.25% on the PLUS loans as it is capped at 8.25%.

Check for the best rates:

But, while taking a loan from private lenders, you have to check out the best rate and fees for consolidation from among the wide array of sources. Private lenders are known to calculate them like mortgage loans and charge like LIBOR rates which are between 1% to 5% fees depending in the loans taken by the student. If you go in for deferred rates of interest, the student loan consolidation rates will be impacted. Interest from deferred rates is added up for consolidation purposes.

After consolidation, there could be fringe hidden discounts and benefits that are paid back to the original lender for loans. Consolidation is loaded with several benefits as loans are restricted to one location and the interest rate does not vary. With longer repayment schedules, you can also expect lower monthly payments. But you need to cross check and compare the original loan with the student loan consolidation rates to know how much you are benefiting from the arrangement.